Airbnb's IPO filing reveals exactly how the pandemic has devastated its business — and the startup is already projecting a winter decline as COVID-19 cases surge

• Airbnb publicly revealed its initial public offering documents on Monday, reporting $2.5 billion in revenue for the first nine months of this year — down 32% from the first nine months of 2019 — and a net loss of $696.9 million during that same period.
• The filing is outside investors' first look at the company's finances after it $4 to go public in August.
• The pandemic hit Airbnb hard, forcing it to $4, raise $4, and $4 to $18 billion as revenue declined 60% in the second quarter.
• The company has rebounded slightly, reporting a profit of $219.3 million in the third quarter, but it projected even greater year-over-year losses in the fourth quarter as COVID-19 cases surge again this winter.
• Airbnb has been under intense pressure to go public, especially from employees whose stock options were reportedly $4.

After months of anticipation, Airbnb made its initial public offering documents publicly available on Monday, providing the most detailed look yet at the company's inner financial workings.

Airbnb reported a third quarter profit of $219.3 million on $1.3 billion in revenue, up from a second-quarter net loss of $575.6 million on $334.8 million in revenue as the company saw bookings rebound slightly after plummeting this summer amid the pandemic.

Airbnb's third quarter revenue dropped nearly 18% compared to the same quarter last year — better than third quarter revenues reported by top competitors like Booking.com ($4) and Expedia ($4) as well as Airbnb's first two quarters of 2020.

But Airbnb's profitable third quarter came amid severe cost-cutting measures and revealed exactly how hard the pandemic has devastated its business.

For the first nine months of the year, Airbnb's prospectus revealed a revenue of $2.5 billion, down 32% from $3.7 billion during the same period last year, while its losses grew to $696.9 million from $322.8 million. Airbnb reported annual revenue of $4.8 billion in 2019.

Airbnb, like the rest of the industry, has been hit hard by the massive decline in travel this year. So far in 2020, travelers have booked 146.9 million nights or experiences through Airbnb, down 41% from the same period last year. Airbnb said it experienced the sharpest decline during the the second quarter, with bookings down 67% year-over-year, while business bounced back slightly in the third quarter with a decline of 28% from the same quarterly period last year.

However, Airbnb said it projects higher year-over-year declines in bookings and cancellations during the fourth quarter than in the third quarter as $4 this winter.

Airbnb cited the pandemic among a $4 that could adversely impact its financial outlook, including slowing revenue growth, an uncertain regulatory landscape as more local governments pass laws aimed at curbing or taxing short-term rentals, nearly $2 billion in debt, and lingering questions about its profitability.

The company plans to list its shares on the Nasdaq under the ticker symbol "ABNB," and will offer an unspecified number of Class A common stock, but the filing revealed the company has a complicated share structure that includes four classes: Class A, Class B, Class C, and Class H.

Read more: $4

Morgan Stanley and Goldman Sachs are the lead banks for the offering, through which Airbnb said it's expecting to raise $1 billion — a likely placeholder number. The startup is reportedly looking to raise around $3 billion, according to $4.

Airbnb was last privately valued at $18 billion, according to $4. It $4 in September and enters a $4 in what will likely be one of the largest offerings this year.

The company's decision ended speculation over how the pandemic would affect its IPO timeline, and it will likely alleviate some of the pressure the company has faced for years from employees whose stock options were $4 this month if the company didn't go public.

Pandemic perils

Airbnb has had a long and at times bumpy $4, particularly during the past several months as the coronavirus pandemic wreaked havoc on the travel industry. Monday's filing comes amid record new COVID-19 cases in the US.

Read more: $4

When travel restrictions hit in early March, $4, CEO Brian Chesky told Business Insider in September. Bookings in Beijing dropped as much as 96%, according to AirDNA, raising existential questions for the travel giant and forcing it to $4 and nearly all hiring.

Already $4, Airbnb $4 from Silver Lake and Sixth Street Partners at a steep interest rate of more than 10% and a valuation of $18 billion — down nearly 50% from its previous valuation of $31 billion, The Journal reported. A week later, the company $4 from the two banks and other investors at a 7.5% interest rate.

As of May, Airbnb still expected its revenue for the year to be $4, forcing it to take even more drastic measures. Airbnb $4 — 25% of its staff — and $4, $4 over its early COVID-19 cancellation policies, and paused its investments in ambitious projects around luxury accommodations and producing travel content in order to focus on its core business.

Airbnb's business recovered a bit during the third quarter, partly due to Chesky's $4, which have $4. He predicted people would flock to $4 over international tourist traps and big cities, travel more for leisure while using screens for work (instead of the other way around), and prefer private spaces over crowded ones like chain hotels.

Those gains also came as domestic travel and $4 more generally, and as Airbnb cut total expenses to just over $3 billion for the first nine months of this year, down 22% from $3.9 billion during the same period last year.

Other questions remain

While going public may allow Airbnb's early investors and employees to breathe a sigh of relief, the company still has significant challenges ahead and will be under even greater scrutiny as a public firm.

Read more: $4

Investors will likely focus heavily on the company's path to profitability. Airbnb said it had a few profitable quarters before the pandemic hit — the second and third quarters of 2018, as well as the third quarter of 2019 — but acknowledged that it has "incurred net losses in each year since inception, and we may not be able to achieve profitability."

Airbnb said it incurred net losses of $70 million, $16.9 million, and $674.3 million in 2017, 2018, and 2019, respectively, and expects to incur an annual loss again in 2020.

It's also not clear how well the company will weather the coronavirus pandemic, especially as cases $4. While Airbnb has recovered more quickly than hotels so far, according to a study from $4, part of that could be attributable to $4 that aren't guaranteed to continue after the virus recedes.

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